The politics of external approval: Explaining the IMF's evaluation of austerity programmes

During the European debt crisis, numerous states launched austerity programmes. The International Monetary Fund (IMF) evaluates and forecasts the likelihood of member states’ success in implementing these programmes. Although IMF evaluations influence country risk perceptions on capital markets, little is known about their reasoning. This article uses fuzzy‐set qualitative comparative analysis (fsQCA) to explore on what grounds the IMF evaluated the success prospects of austerity programmes during the European debt crisis. Results reveal that IMF evaluations are heavily influenced by the programme's implementation credibility. They require a tractable policy problem, a country's institutional capacity to structure implementation, and favour expenditure reduction over revenue measures. By acting as a strict guide on the road to fiscal adjustment, the IMF indirectly influences member states’ scope of policy making through its surveillance activities. Extensive austerity programmes that need to be implemented swiftly are evaluated negatively if the country is not involved in an IMF programme.     

Choosing the path of austerity: how parties and policy coalitions influence welfare state retrenchment in periods of fiscal consolidation

What are the conditions under which some austerity programmes rely on substantial cuts to social spending? More specifically, do the partisan complexion and the type of government condition the extent to which austerity policies imply welfare state retrenchment? This article demonstrates that large budget consolidations tend to be associated with welfare state retrenchment. The findings support a partisan and a politico-institutionalist argument: (i) in periods of fiscal consolidation, welfare state retrenchment tends to be more pronounced under left-wing governments; (ii) since welfare state retrenchment is electorally and politically risky, it also tends to be more pronounced when pursued by a broad pro-reform coalition government. Therefore, the article shows that during budget consolidations implemented by left-wing broad coalition governments, welfare state retrenchment is greatest. Using long-run multipliers from autoregressive distributed lag models on 17 OECD countries during the 1982–2009 period, substantial support is found for these expectations.     

The Politics of Fiscal Austerity: Implications for the United States

As austerity becomes the new normal for advanced nations, questions are raised about whether nations can make the hard choices necessary to bring about a sustainable fiscal future. The political defeat experienced by so many European governments undertaking fiscal consolidations points to the vulnerabilities that leaders will face. This article shows that how some Organization of Economic Cooperation and Development (OECD) nations have survived the daunting politics of fiscal consolidation by timing actions for periods of economic recovery and political honeymoons following elections and by pursuing deficit reduction strategies that emphasize broad sweeping changes yielding high potential for dramatic economic gains over the longer term. Unlike many European nations today, the seemingly endless appetite for US treasuries by worldwide markets give the United States the luxury of choosing to begin deficit reduction only when the economy strengthens. However, the absence of market pressure also reduces the sense of urgency, consigning national leaders to create internal crises such as the 2012 “fiscal cliff” to force their own hand. While the polarized politics characterizing our party system does not bode well for concerted fiscal action, divided government carries the potential for spreading political risks and promoting more sustainable fiscal outcomes, as it has in our recent history and in other nations as well.     

The electoral consequences of austerity: economic policy voting in Europe in times of crisis

Abstract

Voters typically observe macroeconomic outcomes in order to evaluate government performance. However, during crises, when the clarity of economic responsibility is poor and the economy is in recession, citizens need additional sources of information in order to form a reasoned opinion. Government policy response is one such source. This study shows on a sample of 24 European nations from 2004, 2009 and 2014 that in the post-crisis period, economic policies have emerged as one of the key predictors of vote choice, with government decisions to pursue fiscal austerity leading to significantly lower levels of incumbent support. Furthermore, the paper tests the possibility that the effect of austerity is conditioned by the clarity of responsibility. In multilevel systems, where policies are externally imposed, voters could be expected to hold incumbents less accountable for unpopular measures. The analysis, however, provides no evidence that policy effects depend on the extent to which national governments share policy responsibilities with supranational and intergovernmental institutions. Accountability for policy actions is primarily attributed at the domestic level as voters are able to identify the decisional role of national governments.     

The Impact of Public Funding on Contemporary Visual Arts

Public policy for supporting the visual arts has historically followed different traditions in France and the United Kingdom. In an environment of fiscal austerity that impacts upon public funding as well as private patronage, and given the tensions between artistic freedom on the one hand, and market constraints on the other, this article examines how these two traditions of financing artists has influenced the direction of the work itself. A brief historical presentation of the two forms of public support and their evolution in recent decades provides a framework for understanding government attitudes and policies on both sides of the Channel. A closer examination of selected artists, chosen here for their representativeness and their international renown, is used to illustrate the changing nature of public support for visual art creation.     

Do citizens care about government debt? Evidence from survey experiments on budgetary priorities

Ever since the Great Recession, public debt has become politicised. Some research suggests that citizens are fiscally conservative, while other research shows that they punish governments for implementing fiscal consolidation. This begs the question of whether and how much citizens care about debt. We argue that debt is not a priority for citizens because reducing it involves spending and tax trade-offs. Using a split-sample experiment and a conjoint experiment in four European countries, we show that fiscal consolidation at the cost of spending cuts or taxes hikes is less popular than commonly assumed. Revenue-based consolidation is especially unpopular, but expenditure-based consolidation is also contested. Moreover, the public has clear fiscal policy priorities: People do not favour lower debt and taxes, but they support higher progressive taxes to pay for more government spending. The article furthers our understanding of public opinion on fiscal policies and the likely political consequences of austerity.     

The emerging political economy of austerity in Britain

This paper uses data from the British Election Study's Continuous Monitoring Surveys to investigate reactions of the British public to the economic crisis and the austerity policies the Conservative–Liberal Democrat coalition government has adopted to deal with it. Multivariate models informed by competing valence and positional theories of electoral choice are employed to study the impact of these reactions on support for the Conservative Party and Prime Minister David Cameron and evaluations of the Conservatives' ability to handle important issues. Analyses indicate that there is widespread and growing pessimism about the prospects of resolving the economic crisis in the near future. Since the crisis began in 2008, the dynamics of these bearish attitudes have been closely linked to rising unemployment rates. Differing positions regarding the Coalition's austerity policies exert sizable effects on party support, but these attitudes have not negated the force of valence politics considerations such as party leader images, partisan attachments and global assessments of party performance.     

‘This loopy idea’ an analysis of UKIP’s social media discourse in relation to rurality and climate change

This paper focuses on the way that United Kingdom Independence Party (UKIP) attempted to communicate its policies and messages about the topic of renewable energy during 2013–2014. Renewable energy is a fruitful topic to consider as it has a strategic importance in the discussion of the future of the UK. The emergent theme from the analysis was not only rurality and renewable energy but the connection of the issue to scepticism about climate change. This paper uses the qualitative analyses the social media posts and a sample of the linked materials, with newspaper coverage, to reveal the key themes in the UKIP discourse.     

‘Yes,but all responsible Finns want to stop living on credit’: Feeling rules in the Finnish politics of austerity

In 2015, the newly elected government of Finland introduced austerity measures designed to improve the public economy, which had not recovered from the financial crisis of 2007–2008. The article examines how the government sought to secure acceptance for austerity by appealing to citizens’ emotions. We analyse how the measures were emotionally motivated and how, according to the parties in power, citizens should and should not have felt about them. The article shows how the politics of austerity produces various and contradictory feeling rules. These seek to temper citizens’ negative emotions towards austerity, such as dissatisfaction over unfair sharing of pain and distrust towards political authority. Interestingly, the rules evoke hope that a better future lies ahead if citizens follow the proposed measures, yet prompt fears of what will happen if they do not. The government also emphasised its transparency and honesty to prompt empathy and trust from the population.     

Fiscal Austerity and Rental Housing Policy in the United States and United Kingdom, 2010–2016

After the 2008 global financial crisis, both the United States and the United Kingdom introduced austerity policies targeted at particular elements of their national budgets. The purpose of this article is to compare the nature of this retrenchment; the similarities and differences in how it was implemented; and its initial impacts on one of the expenditure areas particularly affected: affordable rental housing programs and housing support for low-income households. Using a wide range of data sources, we find evidence of political and fiscal policy analogies in the timing and forms of the initial policy choices and how these were modified in the face of economic and political pressures. There are considerable similarities both in the instruments used to reduce housing expenditures and in the early impacts on support mechanisms and recipients. However, we find different histories and trajectories of support between the two countries that suggest that the longer term differences in outcomes may be more important.     

Excellence at What Cost? Austerity and the Reform of the School System in England (2010–2016)

The reform of the school system, which has been conducted by the Coalition and Conservative governments since 2010, has largely been austerity‐driven. In spite of the governments’ pledge to protect their budgets, schools have been severely hit by spending cuts. The reform programme has itself been integral to the fiscal consolidation plans by promoting a more cost‐effective system of state schooling. This article discusses the relationship between austerity and reform, and looks at the consequences for the concept of public service. Some specific aspects of the new institutional framework are examined, especially the creation of an independent state sector made up of academies and free schools, which has entrenched the involvement of private sector firms in education. The overhaul of the school system, which started nearly thirty years ago, has now reached a new decisive stage. However, considering the complex relationship between multiple actors and the opposing forces at work, one cannot say with any certainty that it will cause the demise of public service state education.     

The Governance of Fiscal Policy in the United Kingdom and Canada

This article analyzes the governance of fiscal policy in the United Kingdom and Canada under the Blair Government and the Chrétien Government. It seeks to identify whether the capacity of the core executive to steer fiscal policy has been “hollowed out.” The conclusion drawn is that in both the United Kingdom and Canada, far from having been hollowed out, there has actually been a strengthening of the capacity of the Treasury and the Department of Finance, respectively, to steer fiscal policy.     

Ideology as blocked mourning: Greek national identity in times of economic crisis and austerity

This article approaches the 2010–2014 economic crisis in Greece from the perspective of loss and mourning, critically exploring what questions and insights this provokes. We argue first that the rhetoric of mainstream political and media elites has been instrumental in framing responses to the Greek economic crisis in patriotic terms, a frame subsequently adopted by groups from across the entire political spectrum, whether part of the establishment or not. We then draw on discourse theory and psychoanalysis to argue that attachments to the dominant austerity and anti-austerity responses to the crisis can be understood—at least in part—in terms of a failure (or not) to properly articulate and thus mourn the nationalist-inflected loss associated with economic dislocation. We sketch out two ideological pathways in the discourses of austerity and anti-austerity, which we designate as symptomatic of ‘blocked mourning’: a melancholic pathway that seeks to contain loss through self-blame; and a pathway of ressentiment that seeks to contain loss by attributing its cause to a series of ‘others’. We argue that blocked mourning bears a direct relation to the ideological grip of the austerity and anti-austerity discourses, and that we can better appreciate the character and strength of their affective pull by drawing out the fantasmatic aspects of the narratives expressing Greek national and economic identity. Conversely, we argue that a critique of ideology can be understood in terms of the preconditions for mourning, whose satisfaction would make possible a less invested relation to the fantasmatic guarantees underpinning the austerity/anti-austerity narratives. In this view, a critique of ideology proceeds by bringing to light those factors that could facilitate a more open and deliberative articulation of loss, so as to transform and pluralize collective responses to the economic crisis.     

Terrorist threats in Europe: hype or reality?

On 3 October, the American and British governments issued travel advisories on the threat of terrorist attacks in France and Germany. The United States government characterised the threat as ‘high’, while the United Kingdom raised the terrorist threat level for France and Germany from ‘general’ to ‘high’. Shortly afterwards, the French government issued a warning to its citizens about the risk of a terrorist attack in Britain. Within the UK itself, the threat level in respect of Islamist jihadist terrorism has been set since January 2010 at ‘severe’, the second highest level, indicating an attack is likely but not yet judged imminent. This has remained unchanged.     

Public Services after Austerity: Zombies,Suez or Collaboration?

Public services—in the UK and elsewhere—are under considerable pressure, not just from austerity, but also from a variety of social, demographic and technological changes (in effect ‘austerity plus’). In this context, three broad options are open to policy‐makers: continue with tried‐and‐tested approaches while spending less money, which in the UK means a reliance on ‘New Public Management’ (NPM); withdraw completely from certain public services; or develop new approaches to public administration. We argue that all of these approaches have been attempted in recent years, but it is the final option that is most interesting and potentially the most beneficial. In this article, we examine experiments with these new approaches in responding to ‘austerity plus’. In particular, we examine various attempts at ‘collaboration’ in public services and discuss the risks associated with them. We conclude by setting out the extent to which policy‐makers have moved beyond NPM and suggesting some of the benefits that this could bring.     

瓦格纳定律之英国实证检验及其对中国公共财政建设的启示——新公共管理运动背景下的探索

新公共管理运动的兴起,从理论上看财政规模弱化不可避免。英国作为新公共管理运动的发源国之一,其行政管理改革充分贯穿和系统展现了新公共管理理念的精髓。以英国新公共管理运动以来(1979—2006)的财政数据为依据,对瓦格纳定律进行实证检验,具有显著的代表意义。根据英国财政数据的研究结果与新公共管理理念高度吻合,表明瓦格纳定律在英国的适应期已经结束。有理由认为,只要推行新公共管理运动,瓦格纳定律就难以得到支持。鉴于新公共管理运动的世界性,及其不断推进的必然性,应当重新审视瓦格纳定律的客观性。有鉴于此,中国应该顺应世界新公共管理运动的潮流,立足于中国现实和中国社会经济转型的发展趋势,本着服务型政府的内在要求,适时调整财政政策。     

Fiscal consolidation under electoral risk

The European debt crisis has uncovered serious tension between democratic politics and market pressure in contemporary democracies. This tension arises when governments implement unpopular fiscal consolidation packages in order to raise their macroeconomic credibility among financial investors. Nonetheless, the dominant view in current research is that governments should not find it difficult to balance demands from voters and investors because the economic and political costs of fiscal consolidations are low. This would leave governments with sufficient room to promote fiscal consolidation according to their ideological agenda. This article re‐examines this proposition by studying how the risk of governments to be replaced in office affects the probability and timing of fiscal consolidation policies. The results show that governments associate significant electoral risk with consolidations because electorally vulnerable governments strategically avoid consolidations towards the end of the legislative term in order to minimise electoral punishment. Specifically, the predicted probability of consolidation decreases from 40 per cent after an election to 13 per cent towards the end of the term when the government's margin of victory is small. When the electoral margin is large, the probability of consolidation is roughly stable at around 35 per cent. Electoral concerns are the most important political determinant of consolidations, leaving only a minor role for ideological concerns. Governments, hence, find it more difficult to reconcile political and economic pressures on fiscal policy than previous, influential research implies. The results suggest that existing studies under‐estimate the electoral risk associated with consolidations because they ignore the strategic behaviour that is established in this analysis.     

Voter reaction to legislator dissent across political systems

Research shows that legislators who dissent from the political line of their party are rewarded among constituents. This raises concerns about future party cohesiveness and, in turn, parties’ ability to govern and voters' ability to hold parties accountable. However, nearly all studies are conducted in single-member district systems, such as the United States and United Kingdom, which are generally considered most-likely settings for observing such effects. In this note, we conduct a country comparative study of voter reaction to legislator dissent across single-member and multi-member district systems (US, UK and Denmark). Building off existing theories, we argue that voters in multi-member districts also reward legislator dissent but that the reward is significantly weaker. We support this argument with observational and experimental data. Our results suggest that concerns regarding party governance and accountability associated with legislator party dissent extend to—but are less pertinent in—the more widespread multi-member district systems.     

Fiscal Adjustments and Their Effects During the Transition to the EMU

The transition phase to EMU hasbeen accompanied by considerable monetaryand fiscal consolidation efforts in the EU.This paper analyses this consolidationprocess and its effects on economicactivity in the EU. It is tested to what extent fiscal retrenchment efforts havedepressed or stimulated private spending. Inthe case of the latter non-Keynesian effectsdominate the traditional Keynesianexpenditure effects of government spending,taxation and transfer payments.     

The New Ageism

This article takes issue with the apparently entrenched political narrative about ageing and older people which is routinely expressed in both ministerial rhetoric and media headlines warning of the ‘burden’ of dependency and intergenerational strife. It argues that this narrative is rooted in the potent combination of ageism and neoliberalism and is being ramped‐up by the Coalition Government's austerity fixation. The social and political risks of this omnipresent narrative are discussed as is the persistence of the case that generational conflict is inevitable, in both the UK and US, despite the complete absence of any evidence supporting it. The article finishes by urging action to alter the course of both individual and societal ageing and so avoid future spending demands as well as improving the quality of life of current and future generations of older people.